Glossary

AML (Anti-Money Laundering) refers to the application of anti-money laundering measures to financial transactions. AML regulations and procedures are extended to cryptocurrency exchanges, wallet providers, and blockchain-based businesses to prevent money laundering and illicit activities.

Ethereum’s transaction model through which assets are represented as balances within different accounts. Balances are updated as assets are transferred from one account to another. This model differs from Cardano’s EUTXO model which improves on Bitcoin’s basic UTXO model.

Ada is Cardano’s native currency, which is named after Ada Lovelace, the English mathematician and programmer.

Ada can be used to pay transaction fees on the Cardano network and can also be delegated as stake to a stake pool, helping to secure the Cardano blockchain. Delegating ada allows the user to receive rewards for doing so. All rewards are distributed in ada every 5 days, i.e. every epoch.

Ada has six decimal places and these fractions of ada are called lovelaces. They can be thought of as cents to a dollar.

An algorithm is a step-by-step procedure or set of rules designed to solve a specific problem or perform a specific task. It is a precise and unambiguous sequence of instructions that can be followed to achieve a desired outcome.

An item on the blockchain that has a value, such as ada or a token.

Sometimes called atomic cross-chain trading, atomic swap is the exchange of one cryptocurrency to another cryptocurrency without the need to trust a third party. It’s called atomic (referring to the Greek term atomon, i.e. indivisible) since there aren’t two separate transfers, but one single transfer that does the swap at once.

Cardano development phase that focuses on scalability and performance improvements.

A web-based tool or application that allows users to explore and navigate a blockchain network. It provides a user-friendly interface to search, view, and retrieve information about transactions, blocks, addresses, and other data recorded on the blockchain.

On the Cardano blockchain we can use block explorers like explorer.cardano.orgcardanoscan.io, and cexplorer.io.

Typically refers to the process of transmitting newly created blocks to all nodes on the network so that they can validate and add the block to their copy of the blockchain. Efficient block propagation is important for the overall performance and security of a blockchain network.

On the Cardano blockchain, the propagation time should be less than 1 second to ensure that blocks are less likely to become orphaned.

The average time between blocks. In early 2022, Ethereum’s block time was  12-14 seconds, Cardano’s 20 seconds, and Bitcoin’s 10 minutes.

BlockTree is the pioneer in applying verification technology to reforestation efforts in Asia by using NFT minted on Cardano, ensuring trust, transparency, and traceability between Sponsors and Planters.

Refers to the process of initializing and establishing a new blockchain network or node. It involves setting up the necessary infrastructure, protocols, and consensus mechanisms to enable the network to function and grow. The settings include: Genesis block creation, network initialization, consensus algorithm setup, blockchain synchronization, block verification and validation.

Contract for difference. Part of a wider group of trading products known as derivatives, they are a popular method of trading stocks, bonds, and commodities.

An open-source permissionless blockchain platform built on the Ouroboros proof-of-stake protocol. Cardano was launched in 2017 to address issues with earlier blockchains such as high energy use, limited interoperability, and scalability challenges. Cardano is being developed in five phases: Byron (completed 2019), Shelley (decentralization, 2020), Goguen (smart contracts, 2021-), Basho (performance improvements, 2021-), Voltaire (treasury and governance, 2021-).

A summary of Cardano’s development through five essential themes (ByronShelleyGoguenBasho, and Voltaire). Each development theme is centered around a set of functionalities meant to significantly and steadily improve the Cardano blockchain. A research-driven methodology is prioritized to ensure security and correctness over the speed of development.

As part of the Cardano sidechain toolkit, a chain follower is a general purpose component capable of reading and indexing events that occur on the main chain.

There are several tools that can fulfill this role, they include:

  • Blockfrost, an instant and scalable Cardano API for free

  • Carp, a modular indexer for Cardano with an SQL Postgres backend

  • Kupo, a  fast, lightweight and configurable chain-index for the Cardano blockchain

  • Marconi, the Cardano blockchain indexer for dApp developers

  • Ogmios, a lightweight bridge interface for cardano-node

  • Oura, the tail of Cardano

  • Scrolls, a read-optimized cache of Cardano on-chain entities.

The list is in alphabetical order. The fact that a product is on the list is not an endorsement or recommendation.

A way for a blockchain to agree between all its participants that a transaction is valid. An agreement must be made on which blocks to produce, which chain to adopt, and to determine a single state for the network. The consensus protocol for Cardano is Ouroboros – the first consensus protocol proven to be secure through academic peer review.

Automated market makers (AMMs) are a type of decentralized exchange (DEX) that use algorithmic “money robots” to make it easy for individual traders to buy and sell crypto assets. Instead of trading directly with other people as with a traditional order book, users trade directly through liquidity pools in DEX based on an AMM.

Market makers are entities tasked with providing liquidity for a tradable asset on an exchange that may otherwise be illiquid. Market makers do this by buying and selling assets from their own accounts with the goal of making a profit, often from the spread (the gap between the highest buy offer and lowest sell offer). Their trading activity creates liquidity, lowering the price impact of larger trades.

Common DEXs based on AMM protocol operate following the Constant Product Formula: X x Y = k

k: a constant balance of assets that determines the price of tokens in a liquidity pool

X : the amount of token A

Y: the amount of token B

Most of Cardano’s DEXs use this method to build their protocol.

The stake that has been delegated to an individual pool.

A data structure used in transaction outputs to convey various pieces of information. All addresses carry a network-discriminant tag to distinguish between different networks (e.g., mainnet or testnet) and a proof of ownership (i.e., a proof of who owns the transaction output). Some addresses also carry delegation choices or script references.

A distribution or assignment of digital assets or resources within a blockchain network or ecosystem. It involves determining how tokens, rewards, or other digital assets are allocated to participants, addresses, or specific purposes within the blockchain system.

refers to the names of native tokens created and managed on the Cardano blockchain. They can be common words, and creators can choose arbitrary names. Please note that assets with the same asset name are not necessarily fungible; fungibility depends on whether they have the same Policy ID.

Stands for Byzantine Fault Tolerance, which is a property or characteristic of a distributed system, including blockchain networks. BFT refers to the ability of a system to tolerate and continue functioning correctly even in the presence of Byzantine faults, which are arbitrary and malicious behaviors exhibited by nodes or participants in the system.

A technique that allows for multiple payments to be included in a single on-chain transaction. Hence reducing transaction fees.

A data structure that contains essential information about a block in a blockchain. It serves as a summary or metadata for the block and is typically located at the beginning of each block. The block header includes several important components: version, previous block hash, merkle root, timestamp, and nonce (for proof of work chains).

Typically seen in proof of work (PoW) blockchains, block reward refers to the incentive given to miners who successfully mine a new block and add it to the blockchain. It is the primary motivation for miners to dedicate computational power and resources to the process of mining.

A DApp project on Cardano that enables users to verify authenticity of any previously published document or digital file. Blockademia writes a hash of the published document in a Cardano transaction, so the published hash stays on the blockchain and enables users to quickly and easily check if any file is original or if it has been tampered with.

Blockademia uses it’s native token ACI for multiple uses, including: operating on the DApp, enabling referal rewards, rewarding stakers, and more.

Please visit http://blockademia.com for more info.

Bulletproofs form part of the family of distinct Zero-knowledge Proof systems, such as Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge (zk-SNARK); Succinct Transparent ARgument of Knowledge (STARK); and Zero Knowledge Prover and Verifier for Boolean Circuits (ZKBoo). Zero-knowledge proofs are designed so that a prover is able to indirectly verify that a statement is true without having to provide any information beyond the correctness of the statement, e.g. to prove that a number is found that solves a cryptographic puzzle and fits the hash value without having to reveal the Nonce

The Bulletproofs technology is a Non-interactive Zero-knowledge (NIZK) proof protocol for general Arithmetic Circuits with very short proofs (Arguments of Knowledge Systems) and without requiring a trusted setup. They rely on the Discrete Logarithm (DL) assumption and are made non-interactive using the Fiat-Shamir Heuristic. The name “Bulletproof” originated from a non-technical summary from one of the original authors of the scheme’s properties: “Short like a bullet with bulletproof security assumptions

Bulletproofs also implement a Multi-party Computation (MPC) protocol, whereby distributed proofs of multiple provers with secret committed values are aggregated into a single proof before the Fiat-Shamir challenge is calculated and sent to the verifier, thereby minimizing rounds of communication. Secret committed values will stay secret.

The essence of Bulletproofs is its inner-product algorithm originally presented by Groth and then further refined by Bootle et al. The latter development provided a proof (argument of knowledge) for two independent (not related) binding vector Pedersen Commitments that satisfied the given inner-product relation. Bulletproofs build on these techniques, which yield communication-efficient, zero-knowledge proofs, but offer a further replacement for the inner product argument that reduces overall communication by a factor of three.

Cardano improvement proposal. Any ada holder can suggest an improvement to Cardano. CIPs are community-reviewed; proposals and their history are maintained on the Cardano Foundation’s CIP GitHub repository.

An online explorer that shows you all the projects and DApps building on the Cardano blockchain. Use the Cardano Cube interactive ecosystem map to get a quick overview of all the projects.

A community-driven resource providing questions and answers for users and developers of Cardano.

An offline wallet used for storing cryptocurrencies. Because cold wallets are not connected to the internet, stored assets incur less risks of tampering. This is also known as cold storage.

The total amount of stake that a stake pool controls. It combines the stake that is owned by the pool operator with any stake that has been delegated to the pool by other ada holders. It can be measured as a total ada amount (e.g., 3 million ada), or as a percentage of the total supply of ada within the network (e.g., 5%).

Automated market makers (AMMs) are a type of decentralized exchange (DEX) that use algorithmic “money robots” to make it easy for individual traders to buy and sell crypto assets. Instead of trading directly with other people as with a traditional order book, users trade directly through liquidity pools in DEX based on an AMM.

Market makers are entities tasked with providing liquidity for a tradable asset on an exchange that may otherwise be illiquid. Market makers do this by buying and selling assets from their own accounts with the goal of making a profit, often from the spread (the gap between the highest buy offer and lowest sell offer). Their trading activity creates liquidity, lowering the price impact of larger trades.

Common DEXs based on AMM protocol operate following the Constant Product Formula: X x Y = k

k: a constant balance of assets that determines the price of tokens in a liquidity pool

X : the amount of token A

Y: the amount of token B

Most of Cardano’s DEXs use this method to build their protocol.

Algorithmic Contract Types Unified Standard. A global standard for financial smart contracts. These contracts are being implemented in Cardano’s Marlowe smart contract language.

Adrestia is a collection of products that simplify integration with Cardano. It is made of several application programming interfaces (APIs), command-line interfaces (CLIs), and software development kits (SDKs). Alternatively, Adrestia may also refer to the team working on the project itself.

Anzens is a DeFi platform created & operated by EMURGO; one of Cardano’s founding entities, that enables Cardano Community to tokenize real-world assets.

Launching in 2023, Anzens users will first be able to mint $USDA — a Cardano-native, fully-regulated fiat-backed stablecoin that is pegged to the value of the US dollar.

Moving forward, Anzens will enable people to mint other currencies (e.g. EUR, JPY, GBP, etc.) as well as other real-world assets (e.g. gold, property, etc.)

Asymmetric cryptography is a cryptographic system that uses a pair of mathematically related keys for encryption and decryption. Unlike symmetric cryptography, where the same key is used for both operations, asymmetric cryptography employs two distinct keys: a public key and a private key.

The public key is openly shared or published, while the private key is kept secret and known only to the owner. The keys are mathematically linked in such a way that data encrypted with one key can only be decrypted with the corresponding key from the pair.

Cardano development phase that focuses on scalability and performance improvements.

A set of validated transactions on the network. Blocks contain cryptographic information from previous blocks, and also new transaction data.

Refers to the numerical value assigned to a specific block within a blockchain. The value represents the position of a block in the blockchain’s linear sequence or chain of blocks.

Block size refers to the maximum amount of data that can be included in a single block of a blockchain. The block size is typically measured in bytes and serves as an important parameter in blockchain protocols. It determines the maximum number of transactions or the total size of data that can be included in a block.

At the time of writing, the block size on Cardano is 88kB.

A protocol or platform that allows tokens to be ported from one blockchain to another, where they can be used for payments or to interact with decentralized applications (DApps). Blockchain bridges facilitate chain interoperability and can be either bidirectional or unidirectional. Tokens are locked on their native chain by either sending them to a smart contract or sending them to the wallet of a custodian. Then, the equivalents of those tokens are created on the target chain and issued at an address designated by the person who locked the assets.

The first phase of Cardano development focused on implementing the core transactional platform and community growth. Byron implemented the Ouroboros proof-of-stake consensus protocol.

CLI – Command-Line Interface. It is a text-based interface used to interact with a computer program or operating system by typing commands into a terminal or command prompt.

An independent, Swiss-based non-profit organization that supervises the development of the Cardano blockchain, while shaping legislation and commercial standards. Its mission is to ‘ensure the positive advancement of the Cardano protocol, while also contributing to the positive advancement of blockchain as a world-changing technology.’ Cardano Foundation is one of the three founding organizations of Cardano. The other two are IOG and Emurgo.

A high level of assurance is key when developing and working with smart contracts and decentralized applications (DApps). Applications in Cardano’s DApp Store will have the option to meet and display up to three levels of certification.

The amount of work that can be done by different actors without blocking each other. Cardano’s EUTXO model allows transactions to be processed in parallel, which ultimately improves the throughput of the system while keeping the performance of individual operations the same.

A fixed fee, in ada, which the stake pool operator takes from the pool rewards every epoch to cover the costs of running a stake pool. The cost per epoch is subtracted from the total ada rewarded to a pool, before the operator takes their profit margin. Whatever remains is shared proportionally among the delegators.

Refers to the ability of different blockchain networks or protocols to communicate, share data, and interact with each other seamlessly. It enables the transfer of assets, information, or functionality between multiple blockchain networks that operate independently.

A digital (decentralized) application that runs on the blockchain. Just like a mobile app runs on your iOS or Android device, a Cardano DApp runs on the Cardano blockchain. There are various categories of DApps, such as DeFi products, NFT markets, wallets, exchanges, games, and more.

Decentralized exchange. A type of crypto exchange with no intermediary, where users can securely trade their assets directly with other users.

blockchain-based form of finance that removes the need for intermediaries such as banks, and uses smart contracts to settle deals between parties.

A system in which users retain control over their identity using a blockchain wallet. This technology ensures data is stored securely and protects privacy rights. Users choose when and with whom they share their identity and credentials, which the requester verifies on the blockchain.

The predictability of costs for a blockchain transaction. Cardano uses deterministic pricing, which means you know how much a transaction will cost before you make it. Protocol parameters, rather than network traffic, govern pricing on Cardano, so prices remain stable and low. No fees are charged for failed transactions, which differentiates Cardano from indeterministic chains like Ethereum.

A tool that allows ERC20 tokens to be used on Cardano. Users benefit from a higher capacity of transaction processing, lower fees, and the greater security offered by the Ouroboros consensus protocol. SingularityNET’s AGIX token is the first token that users can move between Ethereum and Cardano.

A computing engine that functions as a decentralized computer with millions of projects that can be executed. It serves as the foundation for Ethereum’s complete operating system. EVM is the component of Ethereum that handles smart contract execution and deployment.

A global blockchain solutions provider that focuses on the promotion of Cardano-based commercial applications. Emurgo is one of the three founding organizations of Cardano. The other two are IOG and the Cardano Foundation.

FOMO stands for “Fear Of Missing Out”

It’s a feeling of anxiety or apprehension that one might miss out on a rewarding or exciting experience that others are having. FOMO can have a negative impact on mental health, as it can lead to stress, dissatisfaction, and a sense of loneliness or isolation.

The amount of ada charged for processing a transaction on Cardano.

The point in time when the result of a transaction becomes immutable and true for everyone on the blockchain.

Also known as a mangled-address, is a Cardano payment address that contains payment part and staking parts of different wallets/private-keys. This is made possible due to the unique design of addresses on Cardano.

A Franken address allows users to separate their staking rewards into a separate wallet. Some application developers can leverage delegation rights to receive rewards or help users maintain their staking rights while those funds are locked in the smart contract. Additionally, Franken addresses are also used as a way to maintain privacy for assets held in a wallet.

Short for ‘Game Finance’, GameFi refers to the integration of blockchain technology and decentralized finance (DeFi) with gaming. GameFi combines the principles of cryptocurrency and blockchain with gaming, creating a new type of gaming experience that allows players to earn real-world value from their gaming activities.

In GameFi, players can earn digital assets such as non-fungible tokens (NFTs) or cryptocurrency by participating in games or completing various in-game challenges. These digital assets can be traded on cryptocurrency exchanges or used to purchase in-game items or services. GameFi also offers players a more decentralized and transparent gaming experience, where ownership and control of the game assets are distributed among the players rather than being controlled by a centralized entity.

A set of data that is mutable through node operations on a ledger. For example, with every transaction of an asset the database entry regarding who owns the asset changes.

An irreversible change to a blockchain protocol. Cardano uses a hard fork combinator to ensure smooth upgrades. Unlike earlier blockchains, Cardano hard forks save the chain history and do not cause disruption for users.

An asset on the blockchain that serves as a medium of exchange for goods or services. Examples include Cardano’s ada, Ethereum’s ether, bitcoin and so on.

At its launch, Cardano’s ada became the leading proof-of-stake cryptocurrency and one of the top 10 by market capitalization in January 2018.

A website where users will be able to download both certified and uncertified applications that run on the Cardano blockchain. See also Certification.

A secure wallet for the ada cryptocurrency that manages balances and enables sending and receiving payments. Daedalus is a full node wallet, which means that it downloads a full copy of the Cardano blockchain and independently validates every transaction in its history.

The property of a system that provides independence from a central governing authority. Cardano is supported by more than 3,000 stake pool operators across the globe who help validate network activities. Peer-to-peer connections and fair governance using Project Catalyst and Voltaire all contribute to Cardano’s decentralization mission.

The process whereby ada owners can assign their funds using their wallets to a stake pool. This helps maintain a computer server to run a node on the Cardano network. In exchange, delegators receive a share of the pool’s total rewards. Delegating your ada is totally safe because no ada leaves the user’s wallet.

Djed is a Cardano stablecoin announced in 2021 and issued by COTI – a crypto payments platform provider.

The accounting model used by Cardano. This is an extended version of Bitcoin’s unspent transaction output model. EUTXO brings greater security, ensures fees are predictable and can process a large number of transactions in parallel. It also supports different types of assets and smart contracts, without compromising the advantages of UTXO. EUTXO’s concurrency benefits high-transaction-throughput applications such as DEXs.

Cardano uses the Edwards-curve Digital Signature Algorithm (EdDSA) with elliptic curve Curve25519 as its base curve (aka. Ed25519). This gives fast signature verification and small signature sizes, which helps to improve the overall performance and security of the blockchain. Additionally, Ed25519 is designed to be resistant to certain types of cryptographic attacks, making it a more secure choice.

However, to ensure better interoperability between blockchains and ease of use for developers, IOG is adding new built-ins to Plutus to support SECP elliptic curves.

A unit of time on Cardano. An epoch lasts for 120 hours, equivalent to 432,000 slots.

FUD stands for “Fear, Uncertainty, and Doubt”

It’s a tactic that is often used in marketing, politics, and other forms of communication to create a sense of fear or apprehension among the audience. FUD can be used to discourage people from taking a certain action. The goal of FUD is to manipulate people’s emotions and influence their behavior by making them feel anxious, uncertain, and doubtful about a particular situation or decision.

Cardano’s fee strategy is based primarily on market demand rather than the actual supply. Research continues to be done on how Cardano can evolve to offer a fair structure of fee tiers that provides the best balance between managing demand and maintaining reasonable costs. Ultimately, the Cardano community will vote on whether or not to implement this tiered system.

A type of cryptocurrency loan that allows borrowers to borrow funds without providing any collateral or undergoing a credit check. Flash loans are typically offered through decentralized finance (DeFi) platforms and are executed using smart contracts on a blockchain. The loan is approved and disbursed almost instantly, and the borrower is required to repay the loan within the same transaction, which usually takes a few seconds to a few minutes to complete.

Flash loans are popular among cryptocurrency traders who want to take advantage of arbitrage opportunities or execute complex trading strategies. They can be used to borrow large amounts of cryptocurrency and execute trades quickly, without the need for liquidity or collateral. Flash loans can also be used for malicious purposes, such as exploiting vulnerabilities in DeFi platforms or manipulating the price of a particular cryptocurrency.

Cardano uses the EUTXO accounting model to prevent harm from flash loans.

token that is identical to many others and can be traded is fungible. For example, one ada is the same as all others and so is fungible. Shares in a company, gold bars, and US dollars, for example, are all fungible. Cryptos are usually fungible, but there are also unique, non-fungible tokens (NFTs).

The fee required to execute a transaction or contract on the proof-of-work network. On Ethereum, for example, gas is paid in ether, the native cryptocurrency of Ethereum. Gas fee is determined by the network’s demand and supply, and is paid to incentivize miners to process and validate transactions. Gas fees are essential to the network’s efficiency and security.

There is no gas on Cardano since it is a proof-of-stake blockchain. Read more about Cardano’s fees and transaction determinism here.

The third phase of Cardano development that brought smart contract support.

A device that stores cryptocurrencies offline and can be connected to a computer to access the funds. Hardware wallets are secure and beneficial in terms of offline security and convenience as they can be carried around and used when needed.

DAO stands for decentralized autonomous organization. It refers to an organization that operates through smart contracts on a blockchain network. A DAO is designed to be autonomous, meaning it operates without the need for centralized control or intermediaries.

A Cardano ecosystem interface map showing all projects and DApps on the Cardano blockchain accessible at DCOne Crypto. Explore the latest projects in the Cardano ecosystem and discover the potential of blockchain innovation.

A piece of information that can be associated with a UTXO and is used to carry the script state such as its owner or the timing details of when the UTXO can be spent.

A unique identifier that is not issued or controlled by a central authority. The controller of the DID (in the case of a person, the object of the DID) can prove ownership without requiring permission from any other party.

an individual or entity that delegates their stake or voting power to a stake pool operator (SPO). SPOs are selected based on the amount of ada they hold or “stake” in the network.

By delegating their stake, delegators entrust the SPO with the responsibility of securing the network and validating transactions. In return, delegators can receive a portion of the rewards that are distributed among all stakeholders.

The act of spending the same coin/token more than once. It is a potential issue in decentralized digital payment systems where transactions are recorded on a blockchain or a similar distributed ledger.

The Ethereum virtual machine (EVM) sidechain is the first sidechain built and released by IOG, with the goal of opening Cardano up to Solidity developers. The EVM sidechain allows the Solidity developer community to build DApps on a lower-fees and environmentally friendly platform that consumes far less energy than proof-of-work blockchains.

ECC is used for developing cryptographic protocols and secure applications. ECC provides the same level of security as other mechanisms while using shorter keys and signatures. Examples of elliptic curves include Standards for Efficient Cryptography (SECP) signatures such as Elliptic Curve Digital Signature Algorithm (ECDSA) and Schnorr.

refers to a Cardano address that is used for receiving ADA from external sources. These external sources can include other users, exchanges, or any entity that wishes to send ADA to your wallet.

External addresses typically do not expire. User can continue to use the same external address to receive ADA for an extended period. However, for privacy reasons, it’s a good practice to rotate or generate new addresses periodically.

A web-based service that provides free tokens for testnets. Cardano testnets faucet can be found here.

A medium of exchange in the form of coins and banknotes issued by central banks. The US dollar, British pound, and Japanese yen are all fiat money.

The process of checking whether system design and the underlying algorithms are correct and satisfy the given requirements and properties. It is based on the formal methods of mathematics and is an integral part of IOG research. The core parts of Cardano are written in Haskell.

The study of logical decision-making made by players within the defined parameters of a system. Game theory provides mathematical frameworks for predicting interactions between people in a system, where they are all looking out for their best interests. Cardano uses game theory to help avoid economic attacks on the network.

The first block in a blockchain that sets the foundation for the network. It is usually created by the network’s creator and contains unique data defining the initial state of the blockchain. Unlike other blocks, a genesis block doesn’t reference any previous blocks and generates the initial supply of cryptocurrency or tokens. In Cardano, the genesis block was created on 2017/09/23 21:44:51 UTC.

There is no single decision-maker controlling Cardano’s growth and development. Instead, decentralized processes empower ada holders to make suggestions and collaborate on decisions. All ada holders can suggest a change through the Cardano improvement proposal (CIP) system, or participate in Project Catalyst to vote on what changes should be made.

Hash rate refers to the measurement of the processing power of a blockchain network, particularly in the context of proof of work (PoW) consensus algorithms. It measures the number of hash operations that a network can perform in a second.

In a PoW, miners use specialized hardware to perform complex mathematical calculations, known as hash functions, to validate transactions and add new blocks to the blockchain. The hash rate is a measure of the speed at which this process occurs.

The hash rate is typically measured in hashes per second (H/s), kilohashes per second (KH/s), megahashes per second (MH/s), gigahashes per second (GH/s), terahashes per second (TH/s), or even petahashes per second (PH/s).

Cardano uses a proof of stake consensus mechanism so there is no concept of hash rate on Cardano.

A functional programming language with a focus on producing secure code.  Haskell is well suited to Cardano’s high-assurance code, and the need for greater formal verification in the blockchain. Core parts of Cardano are written in Haskell and extensive testing processes ensure Plutus Core smart contracts work properly.

family of protocols that overlay the layer 1 Cardano blockchain to process transactions off the main chain. Hydra uses the main ledger as the secure settlement layer, boosts throughput, minimizes the delay in starting to process transactions, incurs low to no costs, and greatly reduces storage requirements.

IEO stands for ‘Initial Exchange Offering’. It is a type of fundraising method used by cryptocurrency startups to raise capital through a cryptocurrency exchange. In an IEO, the startup partners with an exchange that conducts the offering on behalf of the startup.

Investors participate in the IEO by purchasing the startup’s tokens or coins directly from the exchange. The exchange typically charges a fee for hosting the IEO, and the startup benefits from the exchange’s established user base and marketing efforts

IPFS stands for InterPlanetary File System. It is a decentralized and distributed peer-to-peer file storage system that aims to provide a more efficient and resilient way to store and access files on the internet.

In IPFS, files are broken up into smaller pieces, which are distributed across the network and stored on multiple nodes. When a user requests a file, their computer retrieves the pieces from various nodes and reassembles them into the original file. This distributed approach to file storage provides several benefits, including increased availability, faster file transfers, and improved resistance to censorship and data loss.

Aims to enable interconnection between blockchains. Cross-chain transfers and the ‘internet of blockchains’ will grant enhanced user experience and functionality. Sidechains and the AGIX ERC20 converter support Cardano’s interoperability.

A set of two keys: public verification key and private signing key. These keys are used to process and approve transactions within the blockchain.The public key is the address used as a sending or receiving address in a transaction. The private key is the secret that controls access to assets.

  • Anyone can send assets to a public key address

  • It is quick and easy to calculate a public key from a private key, but the reverse is infeasible with current technology

  • No one can withdraw assets from an address unless the transaction is signed with the correct private key.

A database of blockchain records. On Cardano, more than 3,000 stake pools distributed worldwide operate and maintain this ledger.

Cardano’s delegation mechanism is based on liquid staking, meaning that staked funds are never locked and can be spent at any time. Other platforms use a third-party protocol to make staked tokens liquid, which has the potential to introduce security problems.

This represents immutable data that makes smart contract execution on the EUTXO model highly deterministic (predictable).

A measure used by crypto exchanges to rank coins. The ‘market cap’ is calculated by multiplying the number of coins in circulation by the coin price on the day.

How a node stores information about unconfirmed transactions. The mempool is essentially a holding area for transactions that haven’t been included in a block yet.

Cardano’s solution to streamline the speed and efficiency of data synchronization between applicationsMithril retains strong security settings and its uses include secure voting, data exchange between sidechains, and data synchronization within light wallets. It is part of the Basho phase.

Referring to the design of wallet addresses on the Cardano blockchain that enables ADA holders to delegate to multiple pools. Numerous accounts can be created within one wallet, and each account has its own staking key for delegators to sign delegation transactions.

In the context of the Cardano network, when nodes receive two valid blocks for a single slot, nodes will select the block with the higher slot number and orphan the other. The reason for this is that the SPOs do not propagate the block within the appropriate timeframe.

To completely avoid blocks from getting orphaned in height battles, it is crucial for the block to be disseminated across the entire network within one second (1s).

The first of several Hydra protocols, and the basis of improving Cardano’s scalability. Each Hydra Head works as an off-chain mini ledger, similar but faster than the main on-chain ledger, shared between small groups of participants. Many complex protocols can be added as layers on top of Cardano.

Input Output Global. The new name for IOHK, the company that developed the Cardano blockchain. IOG was registered in the US state of Wyoming in 2018, along with an office in Singapore.

A way to raise funds for DApps or projects on Cardano. A project offers its users tokens usable within its DApp in exchange for these users delegating their stake to the project’s pool. This increases the pool’s margin and helps it gain more rewards. Users receive staking rewards and benefit by getting utility tokens. There is no risk of losing funds because they don’t leave your wallet when delegating.

A Rust-coded node implementation with the goal of supporting Ouroboros-based consensus protocols.

The main blockchain ledger that operates on the underlying consensus protocol. This layer includes protocol parameters that control capabilities such as scalability and throughput.

A cryptocurrency wallet that does not need to download the full history of blockchain records. Instead, the wallet links into a website where the full blockchain is accessed. This makes a light wallet faster and easier to use.

The process of creating or adding new coins or tokens to support the demand for transactions on a DEX. Liquidity miners (providers) usually get rewards that incentivize them to support the user base and grow liquidity pools with deposited cryptocurrencies.

The sub unit for ada. One ada = 1,000,000 lovelaces. The name comes from Ada Lovelace, the daughter of Lord Byron who became a mathematician and programmer with her work on Charles Babbage’s Analytical Engine project.

A web-based platform to build and run smart contracts visually, without needing deep programming knowledge. Marlowe provides developers with user-friendly solutions to effortlessly create, utilize, and monetize secure smart contracts, regardless of their level of expertise in software development.

A data structure used in blockchain applications to encode data in a secure and efficient way. The Merkle tree allows a block of transactions to be generated in a single hash, which is used to verify its validity to the original set of transactions. Using hashes is time efficient and does not require the validation of every transaction from the chain history.

According to the standard design of wallet addresses on the Cardano blockchain, an initial seed phrase can generate a very large number of accounts. These accounts are akin to individual sub-accounts within a bank account, enabling users to use them for various purposes such as donations, savings, spending, etc…

Multisig refers to a type of digital signature scheme that requires multiple signatures from different parties in order to authorize a transaction or an action on the blockchain.

A cryptocurrency wallet that can be accessed online to store currencies and make transactions. A hot wallet stores a collection of private keys and needs to be connected to the internet to process cryptocurrency operations.

ICO stands for ‘Initial Coin Offering’. It is a form of a crowdfunding campaign utilized by cryptocurrency startups to raise capital for their projects. During an ICO, investors purchase tokens or coins in the project before it is released to the public. This allows the project to secure funds early on and incentivizes investors to contribute by offering them the potential for financial gain if the project is successful. The tokens or coins can be traded on cryptocurrency exchanges or used as currency within the project’s ecosystem. It is important to note that ICOs are largely unregulated and investors should carefully evaluate the project before investing.

Input Output Hong Kong was founded in 2015 by Charles Hoskinson and Jeremy Wood to create Cardano. The company became Input Output Global in 2018.

A way to encourage participants in the system to engage in the network by rewarding them with a return that is proportional to their efforts. Incentives aim to ensure equality and fairness in a distributed network of participants by encouraging consistent, active, and strong participation. Cardano’s incentives model uses game theory to calculate the incentives required.

K Ethereum Virtual Machine. It allows developers to experiment with any smart contract that can be run on the EVM, and offers improved security and performance.

An additional, off-chain protocol that works on top of the layer 1 blockchain. Parties can securely transfer funds from the blockchain into an off-chain protocol, settle transactions in this protocol independently of the underlying chain, and safely transfer funds back to the underlying chain as needed. Layer 2 protocols improve overall throughput and scalability because they reduce network congestion.

A hybrid of direct and representative democracy to be used in Voltaire. Liquid democracy enables the treasury system to take advantage of expert knowledge in a voting process, as well as ensure that all ada holders are granted an opportunity to vote. For each project, a voter can either vote directly or delegate their voting power to a member of the community who is an expert on the topic.

A liquidity pool is a pool of funds contributed by users that are used to facilitate trades on a decentralized exchange (DEX). In a liquidity pool, users deposit equal amounts of two different cryptocurrencies, which are used to create a market for those tokens. The price of the tokens in the pool is determined by an algorithm that maintains a balance between the two tokens based on supply and demand.

In exchange for providing liquidity to the pool, users receive a portion of the trading fees generated by the exchange.

The live blockchain. Cardano upgrades are assessed on a testnet before being released on the mainnet.

browser-based tool for writing and testing Marlowe smart contracts. Its purpose is to encourage developers who have no Haskell or Javascript experience to build financial products on Cardano.

Information about a digital file. In smart contracts, metadata sets out the conditions under which a deal should execute. In a non-fungible token, metadata can hold information about the ownership or intellectual rights, among other things.

Cardano can support more than one asset type, including user-defined tokens.

An online platform designed to help users discover non-fungible tokens (NFTs), find the new NFTs early, and analyze the most promising projects.

A unique token stored on a blockchain. NFTs can represent digital ownership rights of real-world assets such as a building or a painting or be an asset in and of themselves. Cardano supports NFTs as native tokens. This means that anyone can mint their own NFTs on Cardano without needing a smart contract, which avoids the error-prone complexity found in Ethereum, makes them more secure, cheaper, and faster to transact with.

One of the computer servers or wallets making up the Cardano network. Each node holds a copy of the blockchain ledger and connects with other participants to help maintain network operations. A stake pool operator runs different types of nodes: a block-producing node and several relay nodes that are connected with each other. See Networking.

is typically implemented using metadata transactions. Metadata can be attached to regular ADA transactions or other transactions on the Cardano blockchain. These metadata transactions can contain various types of information, including text, JSON data, or links to external content.

On-chain messages are useful for Non-Fungible Tokens. Creators can use them to store metadata about NFTs, such as the title, description, and provenance of the digital asset.

An order book is the method of currency exchange used in traditional markets. In DEXs, an order book method is used to allow users to transfer assets in a decentralized manner. It a list of open buy and sell offers made by users for a specific number of assets. Every buy order needs to be matched with a sell order.

For example, a user makes an offer to sell A amount of X assets for B amount of Y assets, which is posted to the order book. When another user who wants to swap B amount of Y assets for A amount of X assets comes along, they fulfill that order and the assets are swapped between the users.

A version of Ouroboros deployed in May 2020 to prepare Cardano for decentralization as part of the Shelley development phase.

The Crypsinous version of Ouroboros aims to provide security against adaptive attacks and introduces secure encryption relying on Snarks. Crypsinous is currently not planned for deployment on Cardano.

A system’s ability to allow multiple actors to progress on their tasks simultaneously without interfering with each other. On Cardano, parallelism goes hand in hand with concurrency, another key advantage of the EUTXO model. As parallelism aligns the transactions, concurrency processes them simultaneously. Thus, the maximum achievable parallelism increases as the level of concurrency increases. Through this process, performance and throughput improve.

A measure of the efficiency of a stake pool, given as a percentage, is measured by how many blocks the stake pool has produced (and that are recorded on the main chain) compared to how many it was nominated to produce. For example, if a pool only produces half the number of blocks that were nominated, its performance rating is 50%. This could happen because the pool has a poor network connection, or has been turned off by its operator. Performance ratings make more sense over a longer period of time.

Plutus Pioneer program is a scheme to recruit and train developers to write Plutus smart contracts on Cardano. Participants gain access to a set of courses about how to code in both Haskell and Plutus. The program is interactive, with weekly videos, exercises, and Q&A sessions, along with access to experts in the language.

Project Catalyst is a decentralized innovation fund for Cardano projects set up in 2020. Within two years, 30,000 members had set hundreds of projects underway with a treasury worth $1 billion ada. The project marked the start of Cardano’s Voltaire phase and is one of the world’s largest examples of on-chain governance.

also known as ‘mnemonic phrases,’ is a list of words (usually 12, 15, or 24 words). The words in a mnemonic phrase are derived from a random source of entropy and can be used to restore access to the wallet and its associated funds if the original wallet is lost, stolen, or becomes inaccessible.

When you create a Cardano wallet, the wallet software typically provides you with a recovery phrase. It’s crucial to write this phrase down and store it securely because it is the only way to recover your wallet. Losing your recovery phrase means losing all your assets associated with the wallet.

Native tokens is the feature that lets users create their own tokens on Cardano and these interact with the blockchain just like ada. Tokens can be fungible (interchangeable) or non-fungible (unique), and act as payment units, rewards, trading assets, or information holders. There is no need to create smart contracts to handle native tokens, which removes a layer of added complexity and potential for errors.

Off-chain refers to any transactions, data or activity that occurs outside of the blockchain network itself. Off-chain activity is typically conducted through secondary channels or networks that are not directly recorded on the blockchain, but may still be related to the blockchain in some way.

The openness and accessibility of the blockchain’s underlying software code. An open source blockchain means that the software code that powers the blockchain network is freely available to the public, allowing anyone to view, study, modify, and distribute it.

known as a valid block that is rejected by the network because another block with the same height was added to the blockchain at nearly the same time.
The reason a block becomes an orphan block on the Cardano blockchain is because the stake pool creating that block did not win in the Slot battle or Height battles. Additionally, a block becomes an orphan when it is not propagated across the entire network within the allowed time.

A version of Ouroboros designed to use a system clock based on blockchain technology. This removes the potential for attacks on blockchains that rely on external time sources such as the internet’s Network Time Protocol.

This version of Ouroboros is planned to be deployed in 2023. Genesis adds a novel chain selection rule that enables new or offline parties to safely rejoin the blockchain without a need to do so from the genesis block. This provides the same security guarantees and simplifies the bootstrapping procedure for nodes that were offline for a long period of time.

Refers to an address used for receiving or sending ADA. Cardano uses a unique address format that differs from many other cryptocurrencies, such as Bitcoin or Ethereum. It consists of two parts: the payment address and the stake address, which involves staking ADA to earn rewards.

The process of optimizing code in order to significantly improve block propagation times by reducing the ‘dead time’ between blocks. Thus improving the Cardano user experience.

A consensus mechanism for processing transactions and adding new blocks to a blockchain. Proof-stake validates entries on the blockchain while also keeping it secure and contributing to Cardano’s decentralization.

A fast-developing technology that uses the principles of quantum physics to solve issues that are too complicated for conventional computers.

A piece of information that can be associated with a UTXO and attached to the input transaction to unlock funds from a script.

A technical infrastructure linking Cardano nodes in one unified system to process transactions. Stake pool operators run Cardano nodes that communicate with other nodes to share information about new blocks and transactions. This includes three processes: each operator runs a block-producing node (the node that verifies and creates a block) and two relay nodes (which don’t produce blocks but share information). Wallets and exchanges operate as nodes too. They can help verify blockchain activities by running a block-producing node, which is connected to other relays.

On-chain refers to transactions, data, or activities that occur directly on the blockchain network itself. When a transaction or any other operation is conducted on-chain, it means that it is recorded and permanently stored on the blockchain, becoming an immutable part of the distributed ledger.

A service to transfer information from the real world to smart contracts. The oracle fetches and authenticates live data such as exchange rates and weather conditions to provide this data for smart contracts.

The consensus protocol for Cardano. Ouroboros ensures that all participants agree on valid transactions. It is the first consensus protocol proven to be secure through academic peer review. The name comes from an ancient symbol that represents eternity and symbolizes the theoretical eternity of a blockchain. There have been several versions of Ouroboros: Classic (Byron phase, 2017), BFT (Byron/Shelley phases, 2020), Praos (Shelley phase, 2020), Genesis (planned for 2023), Chronos (in planning), Crypsinous (no deployment planned for Cardano).

A version of Ouroboros deployed on Cardano in December 2017. It established the foundation for an energy-efficient, proof-of-stake consensus protocol.

This version of Ouroboros was deployed in August 2020. Praos introduced decentralized block production by stake pools. It also implemented a novel incentive mechanism for participating in block production and introduced mechanisms to defend against Sybil attacks.

Cardano nodes connect to each other directly, without relying on any intermediary. Direct communication means the network is faster and more efficient. Also, because no single point of potential failure exists, the network is more resilient. P2P also simplifies the process of running a relay node (one of the nodes run by stake pool operators, which does not produce blocks) or a block-producing node to validate transactions on the network faster.

A programming language and a set of tools for writing and testing smart contracts to be used on Cardano. Plutus is based on Haskell and provides a safe, full-stack programming environment.

is a unique cryptographic fingerprint or hash generated from minting script. It serves as a way to uniquely identify and verify the policy associated with a specific native token or set of native tokens. This fingerprint allows users to validate that the policy for a token adheres to the predefined rules.

Policy ID is an integral part of Cardano’s multi-asset ledger model, which helps govern the issuance and management of tokens.

Real-world finance. An IOG initiative started in Africa in 2021 to provide people with fair opportunities in terms of finance and identity management. RealFi aims to deliver real finance for real people, creating value and opportunity for everyone across the globe.

One of the nodes (or processes) run by the Cardano node. It connects to at least one other relay and a block-producing node to share information in the network. See Networking for details.

Cardano’s core elements are based on academic research led by the Blockchain Technology Laboratory at the University of Edinburgh. Once an idea has been proven and tested mathematically by computer scientists, it is implemented as code by software engineers, with the key parts written in Haskell. Changes to the blockchain are then verified on a testnet before being released. IOG’s research teams have published more than 100 papers, most of which have been peer-reviewed at academic conferences. According to Google Scholar, the original Ouroboros paper has been cited more than 1,200 times. There are more than 30 IOG staff members with a Scholar profile and they have been cited about 70,000 times in total.

Stake pool metadata aggregation server, which is designed to track and maintain stake pool metadata to ensure its validity.

Smart contract conditions coded to be automatically executed on the blockchain.

In the Cardano sidechain toolkit, a sidechain certificate creator is a sidechain component whose responsibilities are:

  • To accrue data on the sidechain that needs to be ferried to the main chain (hoard)

  • To inform the governing committee (block producers) of the sidechain that it is time to certify the hoarded data (prove)

  • To make the proof available for the ferrying mechanism (rely).

The primary unit of time used by the Ouroboros algorithm. In current Cardano versions, a slot is exactly one second. Slots that are inhabited by blocks are called active slots. In early 2022, Cardano parameters set one in 20 slots as active, so the average block time is 20 seconds.

Programs written to self-execute when certain pre-determined conditions are met. On Cardano, contracts can be written in PlutusMarlowe, or Haskell. Such contracts are the basis of decentralized finance (DeFi).

Every ada holder has a stake in the network that they can delegate to a pool from their wallet. The process is safe because no ada leaves the user’s wallet.

A computer server running the Cardano node to validate transactions and produce blocks. Each pool holds the combined stake of many ada owners in a single entity, or pool. Rewards earned by the pool are shared between the operator and their stakeholders.

Cardano is a proof-of-stake blockchain and has been estimated to use electricity equivalent to 57 US homes, which can be met by a single wind turbine. The founders of Cardano set out to tackle the unsustainability of proof-of-work blockchains at the outset. In 2021, academics and researchers reckoned that Bitcoin and Ethereum used as much power as a country the size of Argentina – 100,000 times as much energy as all the proof-of-stake blockchains.

A blockchain that aims to resolve fundamental issues of the first two generations (Bitcoin and Ethereum). Third-generation blockchains focus on improved scalabilityinteroperability, and self-sustainabilityCardano is a third-generation blockchain.

A cryptographic token that represents a footprint of value defined by the community, market state, or self-governed entity. A token can be fungible (tradable) or non-fungible (unique), and act as a payment unit, reward, trading asset, or information holder.

The process of representing real-world assets with digital tokens.

$USDA is a fully-regulated fiat-backed stablecoin that is pegged to US Dollars value, minted through Anzens.

Anzens is a DeFi platform created & operated by EMURGO, one of Cardano’s founding entities that enable Cardano Community to tokenize real-world assets.

A digital token that holds certain functionality in regard to a concrete project or environment. These tokens can be used as payment units, rewards, or grant access to a specific network.

A protocol upgrade to the Cardano blockchain that was implemented using Cardano’s HFC approach. Its objective is to make the blockchain more robust and scalable, increasing throughput and reducing latency in block transmission.

The Vasil hard fork combinator saw the implementation of block diffusion pipelining and added reference inputs, inline datums, and reference scripts through four key CIPs (CIP-31CIP-32CIP-33CIP-40).

These changes allow for the network to process a larger number of transactions, improving the consistency of block propagation times without affecting network performance.

Yoroi is a light wallet for daily use with Cardano. Yoroi was developed by Emurgo.

ZKP is the technology used to support applications within a multitude of settings that require a balance between privacy and integrity. Zero-knowledge proofs ensure that the verifier is not aware of the witness who evidences the truth of the provided statement, which benefits in privacy settings.

Small proof sizes and fast verification time are important for the practical deployment of zero-knowledge protocols. There are several practical schemes from which to choose, with a vast space of trade-offs in performance and cryptographic assumptions:

  • Non-interactive zero-knowledge arguments (NIZKs): this is the most general concept. NIZK can be non-succinct but as a benefit might rely on standard cryptographic assumptions and often satisfy strong security guarantees. 

  • Succinct non-interactive zero-knowledge arguments (SNARGs): achieve succinctness at the cost of stronger cryptographic assumptions and often weaker security guarantees. 

  • Succinct non-interactive zero-knowledge arguments of knowledge (SNARKs or sometimes zk-SNARKs): these are SNARGs that are also proofs of knowledge and zero-knowledge. The name is also popular because of Lewis Carrol’s nonsense poem “The Hunting of the Snark”. 

  • Succinct transparent arguments of knowledge (STARKs): transparent here refers to the setup only requiring a trusted hash function. This is beneficial but can come with a performance overhead.

A type of scam or fraudulent activity that occurs in decentralized finance (DeFi) protocols, particularly in yield farming and liquidity pools. In this scam, the creators or developers of a DeFi project manipulate the system in a way that causes investors or users to suffer significant financial losses.

A term used to indicate that a particular stake pool has more stake delegated to it than is ideal for the network. Saturation is displayed as a percentage. Once a stake pool reaches 100% saturation, it will offer diminishing rewards. The saturation mechanism was designed to prevent centralization by encouraging delegators to delegate to different stake pools, and operators to set up alternative pools so that they can continue earning maximum rewards. Saturation, therefore, exists to preserve the interests of both ada holders delegating their stake and stake pool operators.

A digital asset that derives its value from an external asset that can be traded. Usually, it represents stocks, bonds, or revenue participation notes. Security tokens are subject to federal law governing regulations.

A toolkit developed by Input Output Global (IOG) and a team of specialist engineers, used to build unique sidechains that extend and scale Cardano without jeopardizing its stability or security.

The toolkit allows a sidechain to have its own consensus algorithm and features. The sidechain is connected to the Cardano main chain through a bridge that allows asset transfer between chains. The finality of blocks is determined through a consensus mechanism that relies on the security of the main chain.

The toolkit consists of Cardano Plutus scripts, a chain follower, and the sidechain module.

The IOG team has used the toolkit to create a proof of concept Ethereum Virtual Machine (EVM) Cardano sidechain for developers to test and experiment with.

Regarding the production of blocks on the Cardano blockchain, there can be instances when two pools create valid blocks in the same slot. Only one block can be added to the blockchain for each specific slot, so one of them has to be discarded (orphaned block).

If a slot battle occurs, the winner is determined randomly. The pool operator has no influence over the selection of the block occurring on other nodes in the network.

A modification to the software protocol that renders previously valid transaction blocks invalid. A soft fork is backwards-compatible since old nodes will identify the new blocks as legitimate. In contrast to a hard fork, which needs all nodes to update and agree on the new version, this type of fork merely means a majority of miners to update in order to enforce the new regulations.

Understanding soft fork usage

Soft forks are frequently used to add new transaction kinds, requiring only that the participants (e.g., sender and recipient) and miners comprehend the new transaction type. This is accomplished by presenting the new transaction to older clients as a “pay-to-anybody” transaction (in a special form) and convincing miners to consent to refuse blocks containing these transactions until the transaction verifies under the proposed regulations. Pay-to-script hash (P2SH) was implemented to Bitcoin in this manner.

Refers to a reward account, one of the two components that make up an address on Cardano. They are used in various operations related to rewards, such as delegating ADA to pools, checking the reward balance, etc. Anyone who owns a stake address also owns a stake in any associated funds linked to that address. It’s worth noting that stake addresses cannot be used for sending or receiving payments, unlike payment addresses.

Typically, a stake address will start with ‘stake1’, for example: stake1ux7k5ztvhwj7ykv5v7vwjjzdfckjk0v74z9p9m5w0t5534clf62eq

A person or organization that takes responsibility for setting up and keeping the pool running. This usually entails owning or renting a server, holding the key to the pool, and maintaining and monitoring the node.

A measure of the level of activity on a blockchain. Because blockchain transactions differ from traditional payments (and between systems) by their functionality and volume, throughput is a better metric. Whereas Ethereum’s TPS only considers individual transactions, the EUTXO accounting model allows for multiple transactions to be included in a single one. Cardano’s TPS, therefore, cannot accurately be compared to Ethereum’s TPS as 1:1.

The volume of data processed by a system in a given amount of time. Throughput is steadily being increased on Cardano to meet the demands of an ever-growing DApp ecosystem and community of Cardano adopters.

Token burning is the process of removing tokens from circulation. This reduces the number of coins in use.

The process of sending or receiving assets on the blockchain.

A group formed to encourage collaboration on making the unspent transaction output (UTXO) model more scalable, secure, and interoperable. Formed by Input Output GlobalErgoNervosKomodo, and Topl.

Stands for “Verifiable Random Function”, a cryptographic function that generates random numbers in a deterministic and verifiable manner. It’s a crucial component for various applications, such as generating random numbers for lotteries and ensuring secure and unpredictable leader selection in proof-of-stake blockchain networks.

On the Cardano blockchain, it was used to select slot leaders in the Ouroboros consensus protocol, helping ensure that the selection of slot leaders is fair and unpredictable.

The fifth phase of Cardano development in which treasury and governance capabilities are being delivered.

layer 2 scaling technique that allows blockchains to validate transactions faster while keeping fee prices low.

An early-stage investment fund focused on innovative companies primarily using the Cardano blockchain and its technology. The cFund is managed by Wave Financial and IOG.

Standard for Efficient Cryptography. SECP256k1 is the name of the elliptic curve used by many blockchains to implement public key cryptography. Examples of SECP include the Elliptic Curve Digital Signature Algorithm (ECDSA) and Schnorr which allow users to verify the integrity of specific signed hashed data. ECDSA and Schnorr signature algorithms work with the SECP256k1 curve in many blockchains.

Cardano uses the Edwards-curve Digital Signature Algorithm (EdDSA) with elliptic curve Curve25519 as its base curve (aka. Ed25519). 

To ensure interoperability between blockchains, and to make it easier for developers to build cross-chain decentralized applications (DApps), Input Output Global (IOG) is adding new built-in functions to Plutus. These will support ECDSA and Schnorr signatures allowing developers to use a wider range of multi-signature or threshold signature designs natively on Cardano.

The ability of a system to handle more and more work. This is a vital property for a blockchain or it will become slower and more expensive to use. Addressing the scaling problems of earlier blockchains was a founding aim of Cardano and is the focus of the Basho stage of development. Cardano is scaling in eleven major ways in 2022.

A blockchain that runs independently alongside the main chain and is linked to it. Transactions are transferred to the sidechain for processing and the results are sent back, thus taking a load off the main chain. This improves speed, lowers execution fees, and increases overall throughput.

A penalty charge on some proof-of-stake blockchains for dishonest behavior by network validators. There is no slashing on Cardano. Instead, Ouroboros provides incentives for good behavior. Each stake pool operator pledges funds to their pool to make it more attractive and earn a higher percentage of rewards. Dishonest behavior will result in loss of rewards. Leading-edge game theory techniques have contributed to this strategy.

stake pool that has the right to create a block on Cardano within the current slot. The selection process is based on the proportion of ada delegated to each pool.

A cryptocurrency whose value is held constant against one or more other assets. The assets may be a ‘basket’ of currencies, a single currency (eg, the US dollar or the euro), commodities such as gold or silver, stocks, or other cryptocurrencies. Stablecoins include mechanisms that maintain a low deviation from their target price and so are useful to store or exchange value. Their built-in mechanisms remove price volatility.

Refers to a cryptographic key pair associated with a stake address. Stake keys give you access to any rewards held in the stake address, as well as the ability to delegate the wallet to a pool to earn staking rewards.

Note that ADA holders can have multiple stake keys and can delegate their ADA to different stake pools simultaneously.

On Cardano, stake pool operators earn rewards for running the nodes that support the network and produce blocks. Staking means committing funds to a pool to support these activities. Cardano has non-custodial staking, meaning that there are no locking periods, and ada owners can spend their staked funds at any time.

A prototype network where users can experiment with the new features and code to provide feedback before a live mainnet launch.

A fee structure that seeks to ensure a level of fairness in access and throughput for all Cardano blockchain users. The Cardano community decides how this pricing system will work.

The process of creating tokens.

5% of all earned rewards every epoch are put into a pot to fund Cardano. During the Voltaire development phase, treasury reserves will be used for development, system improvements, and to ensure the long-term sustainability of the platform.

An accounting model that is used by blockchains to track users’ funds and their distribution within accounts. The UTXO accounting model guarantees security, data privacy, and scalability at the core of financial activities.

Validator is a node or participant in the network that is responsible for verifying transactions and adding them to the blockchain. Validators play a critical role in maintaining the security and integrity of the blockchain by ensuring that only valid transactions are processed and recorded on the ledger.

Software to manage cryptocurrency balances and make transactions. ‘Light’ wallets for Cardano such as Yoroi are designed for fast, easy access via browser or on a mobile phone; full node wallets such as Daedalus are designed for desktops. While they require a high-spec machine and regular syncing, they are the most secure (non-hardware) wallet and help maintain the network by downloading a full copy of the blockchain each time they are used.

Zk-SNARK is an acronym that stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.” A zk-SNARK is a cryptographic proof that allows one party to prove it possesses certain information without revealing that information.

In this general setting of so-called interactive protocols, there is a prover and a verifier and the prover wants to convince the verifier about a statement (e.g. that f(x) = y) by exchanging messages.

The generally desired properties are that no prover can convince the verifier about a wrong statement (soundness) and there is a certain strategy for the prover to convince the verifier about any true statement (completeness). The individual parts of the acronym have the following meaning:

• Succinct: verifier run time is exponentially less than running the complete computation

• Non-interactive: there is no interaction. For zkSNARKs, there is usually a setup phase and after that a single message from the prover to the verifier. Furthermore, SNARKs always have the so-called “public verifier” property meaning that anyone can verify without interacting anew, which is important for blockchains.

• ARguments: the verifier is only protected against computationally limited provers. Provers with enough computational power can create proofs/arguments about wrong statements (Note that with enough computational power, any public-key encryption can be broken). This is also called “computational soundness”, as opposed to “perfect soundness”.

• Knowledge soundness: it is not possible for the prover to construct a proof/argument without knowing a certain so-called witness (for example the address she wants to spend from, the preimage of a hash function or the path to a certain Merkle-tree node).